This remarkable turn of events is likely to occur as the baby boom generation reaches traditional retirement age. If this generation retires from the labor force at the same rate and age as current older workers, the baby bust generation that follows will likely be too small to fill many of the projected new jobs. Even when the “echo boomers” – the children of the boomers – hit the labor market, those 55 and older will still be the dominant age cohort.
Between 2015 and 2030, the U.S. Census Bureau projects a total increase in the U.S. population of 47 million. The increase in the number of individuals 55 and older will be more than double the increase
of those ages 20 to 54 (an additional 25 million
versus an additional 12 million). If this shift in the
age distribution to older Americans contributes to
substantially reduced labor force participation, longterm
economic output and real household income
could suffer as jobs go unfilled.
This analysis is based on official forecasts of population
growth from the Census Bureau; official forecasts
of job growth and labor force participation
from the U.S. Bureau of Labor Statistics; and estimates of the number of jobs in specific occupations based on the Labor Market Assessment Tool developed jointly by the Dukakis Center for Urban and Regional Policy at Northeastern University and the Research Division of the Boston Redevelopment Authority.
When the economy recovers from recession – and the economy has always recovered from past recessions – after some period of time, labor shortages typically follow. The best example, of course, is World War II. The nation experienced high unemployment rates throughout the 1930s. It was only after 1941 that war demands prompted tremendous labor shortages and millions of women were recruited into the labor force to meet the need. During the early 1960s there was high unemployment. By the last four years of the decade, the unemployment rate was less than 4 percent each year, and the concern was about “structural unemployment,” or a continual shortage of trained employees to fill a large number of job openings.
Within less than a decade,
the United States may not
have enough workers to fill
expected job openings.
After the Recovery: Help Needed 3
A similar pattern is likely to emerge in the next 10 years. When the nation comes out of the current jobs recession – and this may take two to three years – we will begin to see spot shortages in labor markets. If the economy continues to improve, the spot shortages will become more general, and we will experience the shortages our research projects. The Numbers
By 2018, with no change in current labor force participation rates or immigration rates and an expected return to healthy economic growth, we
will have more jobs than people to fill them. That’s true within the entire economy and particularly true of the fast-growing social sector. In the economy overall, our research shows that:
• There could be 14.6 million new nonfarm payroll jobs created between 2008 and 2018 (and a total of 15.3 million including self-employed workers, family members working in family businesses and those in farming). • Given projected population growth and current labor force participation rates, assuming no major change in immigration, there will only be about 9.1 million additional workers to fill all positions. Even taking into account multiple job holders, the total number of jobs that could be filled at current labor force participation rates...